National Defence Committee on Nov. 28th, 2024

[Don Stewart, Conservative, Toronto—St. Paul's, ON]

At any time you could have one thing bumped up ahead of another.

[Simon Page]

Absolutely. That would be the case, for instance, for an urgent operational requirement. I could ask my team to pause one thing and execute a UOR.

[Don Stewart, Conservative, Toronto—St. Paul's, ON]

When we're talking about the shipbuilding program and the subs, will we be able to procure subs and ships at the same time?

[Simon Page]

The national shipbuilding strategy right now has three strategic partners—three large shipyards. They have signed up to programs of work in their umbrella agreements under specific terms and conditions that are going to be mirrored in what my minister was speaking to earlier about strategic partnerships. These programs of work can be in motion at any one time depending on government priorities.

My assessment at this time is that the submarine project will come in, will be assessed from a capacity point of view—capacity domestically for sustainment and capacity internationally—and we'll be able to fit it in.

[Don Stewart, Conservative, Toronto—St. Paul's, ON]

I know you said you have a nice tight team right now that's looking at the subs. When that project does ramp up, how many more people do you think you're going to need to execute the procurement?

[Simon Page]

This will be a massive procurement. I'm comparing it early with the Canadian surface combatant. For the Canadian surface combatant, we started in the early days with a team of probably 15 to 20. We're now around 40. I would see the submarine going in a similar direction.

The team at DND will be a lot more numerous than mine. Head counts will be a lot higher over there.

[Don Stewart, Conservative, Toronto—St. Paul's, ON]

Are there lessons learned from the Arctic and offshore patrol vessels procurement that directly apply to the procurement of the frigates that will help to streamline things so we can do continuous improvement?

[Simon Page]

Absolutely. Actually, one of our key discussion points with Irving Shipbuilding is to make sure that the learning is implemented.

We're seeing results, by the way. This project went through COVID. It survived COVID very nicely. As we're going to launch AOPS number six in a few days, it's been on a really good stream of delivery. That delivery, for me, has integrated lessons learned, and some of them are definitely going into the Canadian surface combatant preparations, as we expect to cut steel on the combatant some time in 2025.

[Don Stewart, Conservative, Toronto—St. Paul's, ON]

Were any RFIs or RFPs cancelled as a result of the recent budget cuts in the DND budget?

[Simon Page]

As far as I'm concerned, in PSPC—and we run the RFIs and the RFPs—we have not cancelled anything.

[Don Stewart, Conservative, Toronto—St. Paul's, ON]

How long does it generally take? With regard to the subs, there are some RFIs out right now. When do you think the first purchase orders can be placed for a hull or something like that?

[Simon Page]

With all due respect, I'm not sure if I want to answer that at this time. It is too early. We barely have the high-level parameters of the project.

To my earlier point, sometimes we're too early in putting parameters around a project. I don't think we're in a space to do that at this time.

[Don Stewart, Conservative, Toronto—St. Paul's, ON]

Thank you.

[The Chair, Liberal, John McKay]

Thank you for rejecting that invitation to speculate.

Madam Lambropoulos, you have five minutes.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

Thanks to you both for staying to answer some more of our questions.

Mr. Page, I heard you say that something we can improve on is better planning and forward thinking so that we meet our goals quicker and work together with partners. You heard me ask a question of Mr. Duclos earlier about the Canada aerospace industry, which has been spoken about. He didn't have an opportunity to really answer it in depth.

I'm wondering if you can share your thoughts on what that strategy would look like. Are there any talks of putting any kind of structure in place? What are your hopes for that kind of strategy?

[Simon Page]

Maybe I'll go back to the planning piece that I spoke about earlier and try to match it with what an aerospace strategy could look like.

As to planning, for me there's sometimes an expectation that when going into procurement, we're just a short time frame away from getting our equipment, but buying sophisticated helicopters or sophisticated aircraft or even a remotely piloted aircraft system takes time. That planning, for me, is critical. That planning would feed the strategy, because we need to give industry the time to prepare the grounds for the investments and procurements that Canada is about to make. If we don't give them the time, they won't be ready for the procurements that are coming.

A key part of the strategy would be that. It would enable them to plan and invest properly in what's coming. It would also give them time to establish themselves in a relationship that they need to establish, and then be ready when the go time comes and PSPC releases a draft RFP or an RFP.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

Mr. Duclos also spoke about interoperability, and my hope is that we can push and promote our industry outside Canada. With NATO and our partners, we like to operate in similar ways and want to use similar equipment, but oftentimes Canadian equipment isn't necessarily promoted or the one to be used, except in the case that he mentioned recently with the icebreakers.

I'm wondering, in general, in what other ways we can help our companies thrive within those partnerships. I've heard from companies in my riding that NATO often invites them to showcase their talents and the capabilities they produce. How can our government do better in helping those materialize into procurement from other countries?

[Siobhan Harty]

Maybe I will take this question.

Our colleagues at National Defence will be leading a defence industrial strategy. That was mentioned by the minister. It is a key place where some of that work and thinking can happen, linking it up to an export strategy. However, one thing to note with NATO is that increasingly they're moving towards joint requirement setting, joint procurements, and collaboration. That is an important place where Canadian companies can get plugged into international collaborative efforts. That's one thing we're working on collectively.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

I have heard there are other issues. There are some great capabilities here. Companies will showcase their stuff and get really good feedback from other countries, but they're basically told to see their Canadian reps, who can help them move things along the ladder. It's very difficult for them to find those reps. What can we do to improve that situation, and who would be in charge of it?

[Siobhan Harty]

We have different systems in place internationally, either through trade commissioners or through defence attachés. I've been leading the work with other government departments and consulting with allies about what they do.

We recognize that's a gap and that we could do much better there. We are looking at it in the context of the review and working with the NATO Support and Procurement Agency and other efforts—as I mentioned before through NATO—to see how we can make it easier for our companies to find points of access into those international opportunities.

[The Chair, Liberal, John McKay]

Thank you, Madam Lambropoulos.

We have the last questions of Madame Normandin in 2024 at the defence committee. Go ahead, for two and a half minutes.

[The Vice-Chair, Bloc, Christine Normandin]

I would like to know your opinion on the number of approvals required in a procurement context.

I see you nodding your head to indicate that this is an interesting question.

I'm throwing out some food for thought. Should we give more latitude to lower-level civil servants, allowing them to make procurement decisions more easily? Should we reduce the number of departments? I'm often told that Innovation, Science and Economic Development Canada, in the case of new technologies, is an additional brake. Over to you.

[Simon Page]

Thank you very much for that question, which is another very good one.

Again, every procurement process is different. Sometimes there are three or four key decisions and things move very quickly, while other times the file is more complex and has to come back several times.

In terms of the Defence Procurement Strategy and governance system I mentioned earlier, there are three main stages in the decision-making process. The first is to contact industry and initiate “pre-solicitation” activities. Next, we decide on the procurement strategy. This is a big decision. There may be several sub-components, so there may sometimes be a backlash. Finally, it's time to award the contract, which is another important decision. Normally, you review the evaluations, decide who you're going to award the contract to, look at what's in place, and so on. These are the decisions related to the governance process.

Obviously, there are also project decisions that are made on the Department of National Defence side. That's probably three more steps, because there's the Defence Capabilities Committee, the Program Management Board and the Independent Defence Procurement Review Board. Then, when everything is in place on our side, we have to go to Treasury Board. When it comes to complex projects, there's a major definition contract that precedes the implementation contract. I'm thinking here of my favourite project, the acquisition of surface combatants. The definition contract must also go through all the stages I've explained, before moving on to implementation.

The process I've described may sound complex and intimidating, but, when people are at the table and things are done the right way, it's effective.

[The Chair, Liberal, John McKay]

We'll have to leave it there.

Ms. Mathyssen, you have two and a half minutes.

[Lindsay Mathyssen, NDP, London—Fanshawe, ON]

Going back to transparency in procurement and the national security exception, one thing we could do, and one thing I put forward, is the option to mirror the policy of the United States. When there's an idea to use the national security exception there and it's triggered as a sole-source purchase, the U.S. Government Accountability Office automatically begins a review of it.

Have any considerations been given by the department to increasing transparency in those initiatives when purchases are made under a national security exception and they're sole-source, to create far more transparency like the Americans have?